How to file taxes for the first time at 18

Mortgages, retirement funds, tax returns—these are strictly adult concerns, right? Hold on to your smart phones, teens, because the reality may shock you.

Some teens and young adults will have to pay taxes this year.

While you’re still considered a minor in almost every respect, the government will treat you like full-fledged adult when it comes to federal income taxes (unless you are self-employed). Take a minute to read this post and find out what you need to do to avoid becoming a tax evader before you’re even allowed to vote.

Here are five tax tips for the first-time tax filers:

1 – Know If You’ll Need To File

If you can be claimed as a dependent on another taxpayer’s return and you’ve had a job—even a part-time one—and earned more than $6,300 in the tax year—you’ll need to file. Alternatively, if you didn’t have a job but made more than $1,050 on unearned income (e.g., interest from investments), you will also be required to file. If you don’t fall into either category and area dependent, you are not required to file a federal tax return. However, if you did work at all and had taxes withheld, filing a return is the only way to get a refund. Plus, it’ll serve as a lesson for future returns. We recommend doing it.

2 – Start the Process ASAP

The sooner you get started on your tax return, the sooner you can receive your refund check. If nothing else, at least begin the process now so you can figure out how much time you’ll need to devote to taxes. This means gathering all the necessary documents, talking to a tax professional or even just researching answers to any questions you might have. This will relieve some of the pressure when it comes to actually filing!

3 – Gather the Necessary Materials

Aside from personal information, which you should already know or have easy access to, you’ll need a W-2 form from each of your employers or a 1099 Form if you were a contractor. These summarize the amounts paid to you over the past year and the taxes being withheld from you. The W-2 form is for employees and must be issued by your employer no later than January 31. The 1099-MISC form is for independent contractors and has a January 31 deadline.

You should also gather any additional forms that showed you spent money on a big expense, like education or charitable donations, as that should be noted in your return.

4 – Be Organized

This is a handy tip no matter what you’re doing, but it’s essential when dealing with government agencies that may not be quick to address your concerns. Translation: store any and every document that is related to your job, your money and your taxes in one secure place. It’ll save you time and headaches when you accidentally misplace your W-2 and need to request a new one.

5 – Take Control of Your Money

There is a way to know if you’ll owe money or get a refund. In the simplest terms possible, if you paid more taxes than the government requires, then you’ll get a refund check in the mail or via direct deposit. On the other hand, if you shortchanged the IRS, then you’ll have to fork over additional funds. To determine how much you’re paying in taxes on each paycheck, look at the W-4 Form you filled out when you began your job. That thing called “exemptions” is directly related to your money and the amount taken out of your paycheck. Fewer exemptions mean more money taken out of your paycheck. It’ll result in less money on your paychecks, but a better chance of receiving a refund. Claim more exemptions and your paychecks will be heftier—but your chances of owing money come tax season will also rise. You can use our W-4 calculator to estimate your refund or tax due based on your current W-4 form; this can give you a better idea of whether you are claiming the right number of exemptions for your tax situation.

If you’re an independent contractor, you’ll be responsible  for taking care of self-employment taxes and income taxes – no one will withhold those taxes or send them to the IRS for you.

If this is your first time filing a tax return, it’s a good idea to consult an adult or even a tax professional to make sure you’re doing everything correctly. If you file electronically and sign up for direct deposit, there’s a chance you’ll get your refund quicker. You’d probably also be happy to know that online tax filing can be free and easy with H&R Block.

There you have it—you’re now one step closer to adulthood. I guess that means you’ll also be cooking dinner tonight, or is that moving a little too fast?

Hopefully this article offered insight for first-time tax filers. Head here for more tax tips.

You might know a lot about geometry or grammar. But most of us weren’t taught how to file taxes in high school. Since taxes are an unavoidable part of life, you’ll have to learn how to do this at some point. Let’s walk through how to file your taxes for the first time. When you have enough income, a financial advisor can offer specialized tax planning services to help minimize your tax liability.

How to File Taxes for the First Time

Tax time is here! The filing deadline for your 2021 tax return is April 18, 2022. Here are steps before you file taxes for the first time.

Find out if you need to file. Before you start worrying about filing your taxes, find out if you need to file at all. That’s right! In certain situations, you might not have to file taxes.

For example, let’s say that you are an unmarried 25-year-old who earned less than $12,500 in 2021. In that case, you wouldn’t have to file taxes.

For 2021, individuals who earned over $12,550 ($14,250 for those age 65 and older), heads of household who made more than $18,800 ($20,500 for those 65 and older) and joint filers with income above $25,100 ($26,450 with one spouse 65 and older, and $27,800 with both spouses 65 and older) must file an income tax return. Married taxpayers filing separately must file when income is above $5, and widowers file if they earned over $25,100 ($26,450 for those 65 and older).

You can use this helpful tool from the IRS to confirm your status.

Gather your information. Before you can file your taxes, you’ll need to gather some documents. The exact documents you need will depend on your financial situation. But here’s a look at what you should try to collect:

• Dependent status. In some cases, you might still be claimed by your parents. But in other cases, you might be claiming your own children as dependents. Determine where you fall to make sure everyone is on the same page. Explore these rules to find out more about your dependent options.
• Gather income information. Depending on your employment status, you may receive a W-2 or 1099 to report your income. Don’t forget to include any information about side income or bank bonuses. Every bit of income that came into your life will need to be reported to the IRS.
• Consider your deductions. A deduction can help you lower your tax bill. Most taxpayers will take the standard deduction of up to $12,950 for single filers in 2021. But if you have lots of deductions, such as a home office deduction or student educational deduction, itemizing might make sense. Here’s a closer look at your deduction options.

File online or with professional help. Once you have all of the information you need, it’s time to move on to actually filing your taxes. You have two options: file them yourself or work with a professional.

If you want to file taxes yourself, there are plenty of free online tools to help you. For example, you could work with the IRS e-file tool. But the free tool is only available if you have an Adjusted Gross Income of $73,000 or less. Other options include TurboTax or H&R Block.

If you don’t want to file by yourself, you can work with a tax professional. This option is especially helpful if you have a complicated tax situation.

Pay your taxes. If you owe money to the IRS, then it’s time to pay up. If you, or a professional on your behalf, filed electronically, you can pay your taxes with a bank account, credit card or debit card. The bank account option could allow you to avoid fees.

If you can’t afford to make a payment at once, then you have the option to apply for a payment plan. Although there are interest charges and penalties, the IRS will work with you to make a payment plan that works.

Bottom Line

Filing taxes might not be the most enjoyable task. But learning how to file taxes for the first time doesn’t have to be scary. If you run into any questions about your unique tax situation, it is never a bad idea to enlist the help of a tax professional. With their help, tax time can be a breeze.

Tax Planning Tips

• A financial advisor could help you develop a tax strategy to minimize your tax liability. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• SmartAsset’s free income tax calculator can help you figure out how much you will have to pay in taxes.

Photo credit: ©iStock.com/BartekSzewczyk, ©iStock.com/ShaneKato

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